EUR/USD Price Forecast: Sticks to gains above 1.1600 as bulls await ECB, US PPI

The EUR/USD pair maintained its upward momentum above 1.1600 during the Asian session on Thursday, awaiting key announcements from the European Central Bank (ECB) and the US Producer Price Index (PPI). Traders exhibited cautious optimism as the pair neared a one-and-a-half-week high, achieved on Wednesday. The European Central Bank (ECB) is widely expected to hike rates by 25 basis points for the second time this year, signaling that market focus will shift to the post-meeting press conference.

ECB President Christine Lagarde's comments during the conference will be closely watched, potentially providing insight into the bank's future policy trajectory and impacting the Euro's value. In parallel, traders will assess the US Producer Price Index (PPI) release, which will have significant implications for the Federal Reserve's (Fed) decision-making process at their upcoming September 15-16 meeting.

Additionally, rising optimism surrounding Federal Reserve rate hike expectations and escalating tensions between the US and Iran could bolster the US Dollar (USD), potentially exerting downward pressure on the EUR/USD pair. From a technical standpoint, spot prices have remained above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, signaling bullish sentiment.

The Relative Strength Index (RSI) is slightly below the overbought threshold, while the Moving Average Convergence Divergence (MACD) line is marginally positive. The next major resistance level is observed at 1.1709, with a potential breakout signaling a sustained recovery towards higher medium-term levels. Conversely, immediate support is provided by the 23.6% Fibonacci retracement level at 1.1625, supported by the 200-period EMA and the 38.2% retracement range between 1.1580 and 1.1570.

If the pair breaches this support, the 50.0% retracement near 1.1531 and the 61.8% level around 1.1489 may become relevant targets.